Canary Wharf plans get court approval

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The Independent Online
LONDON'S pounds 2bn Jubilee Line extension cleared a key hurdle yesterday when the High Court approved proposals that will allow Olympia & York's collapsed Canary Wharf development to emerge from administration.

If the rescue plan is accepted by Canary Wharf's banks and creditors, together owed pounds 670m, then work on the tube line will begin in September, with completion pencilled in for 1998.

No one is legally empowered to sign a deal on behalf of Canary Wharf over the extension while the development remains in administration.

The administrators Ernst & Young said yesterday that they 'successfully applied to the High Court in London to obtain assistance in achieving their objective to rescue the Canary Wharf development'. They got permission to put together a Company Voluntary Arrangement or Scheme of Arrangement for the group, a halfway house back to normal trading.

A spokeswoman for London Transport said yesterday: 'It is a welcome step in the saga but we have some way to go. The go-ahead for the Jubilee Line extension is tied up with Canary Wharf coming out of administration and is at best some weeks away.'

The administrators will now have to send letters to more than 12,000 of Olympia & York's creditors, asking them to vote on the proposals, and a creditors' meeting will be held.

The proposals need to be agreed by a majority of 75 per cent of creditors by value. Creditor approval will enable London Transport to give the green light to its tunnellers, who have already started preliminary work. The vital scheme will link Victoria station to Waterloo, London Bridge and stations in east London.

Talks over the extension have been dogged by the 'drop dead' clause in the original contract. This said that if the project was not completed by the year 2000 the Government would have to reimburse pounds 160m to the banks - the sum they are contributing. This was renegotiated recently so that the contractors on the tunnel project will take over that liability.